Montenegro's opposition joins government until October polls

PODGORICA (Reuters) - Montenegro's opposition will take control of some ministries in a new government approved by parliament on Thursday, in an effort to deflect accusations that state funds could be abused in the run-up to parliamentary elections in October.

A fair election is seen as crucial for Montenegro's EU accession process. Critics say the country is run as a fiefdom by a political elite largely unchanged over the past 20 years, a charge the government rejects.

By 49 votes to 26, parliament approved new legislation under which opposition parties will control the finance, labor, police and agriculture ministries and state institutions such as the investment agency, pension fund and tax office.

The smallest of the former Yugoslav Republics, Montenegro opened accession talks with the European Union in 2011 and was invited to join NATO in December.

But to progress further it needs to step up the fight against corruption and show its electoral process is transparent and fair.

Handing control of key state bodies to the opposition is intended to demonstrate a commitment to financial transparency. The opposition said it was returning to the government only until the election was over, as a safeguard against abuses rather than as a partner.

In addition to the ruling Democratic Party of Socialists, the deal was backed by the opposition Demos, SDP and URA parties.

Two other opposition parties, the Democratic Front and the Socialist People's Party, did not support the legislation, which was passed in the early hours of Thursday. The Front wants Prime Minister Milo Djukanovic to resign, while the Socialists did not get the posts they wanted.

Djukanovic's government has been under fire from both the opposition and the EU, accused of election fraud and abuse of office, including the use of state funds for the election campaign of the ruling party.

Djukanovic who, with one brief pause, has led Montenegro as either president or prime minister for the past 25 years, failed to show up in parliament after clashes last week with the opposition.

He survived a confidence vote in January relying on opposition votes after a long-term coalition partner abandoned him.

Last October, thousands of protesters demanded Djukanovic's resignation and the formation of an interim government that would ensure free and fair elections in the country of 680,000.

(Writing by Daria Sito-Sucic; editing by Giles Elgood and John Stonestreet)